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Let me show you, yes YOU, how to make $50,000 more than your peers; it actually requires minimal work on your part.
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Consider Person A, she decides to begin investing at age 25. She decides that she is going to invest $100 per month until she is 35. So for the next 10 years, she will contribute $100 per month to an investment account. This comes out to a grand total of $12,000 over 10 years that is coming out of Person A’s pocket.
Now consider Person B, she decides that she wants she spend her money to enjoy life in the present and doesn’t start investing till she is age 35. She also decides to invest $100 per month. However, she chooses to invest this amount till she is age 65! So for the next 30 years she will contribute $100 per month to an investment account. This comes out to a grand total of $36,000 over 30 years that is coming out of Person B’s pocket.
How to Make $50,000 More Than Your Peers
Person A only contributed $100 per month for 10 years but didn’t touch that money until she turned 65. So she allowed her $12,000 to sit and grow by compounding the interest. Assuming a modest 8% return, Person A will have a grand total of $200,061 and that only cost her $12,000 out of pocket!
Person B contributed $100 per month for 30 years and now she is 65 and ready to use this money. Assuming a modest 8% return, Person B will have a grand total of $149,036!
Person B invested 3x as long as Person A did and is still behind by a whopping $80,000!
Now you know how to make $50,000 more than your peers, so take advantage of compound interest and time! Start early and save often! This was only $100 per month, perhaps you can slowly increase your principal contribution each year?
Do you think $100 is too much money to allocate into an investment account monthly?